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Implementation of Prospectus Directive

Under the EU Prospectus Directive certain exemptions from the obligation to publish a prospectus apply to the public offer of particular types of securities. However the issuer must make a document available that contains specific information on such an offering.

Besides stressing the need to make such a document available to be able to rely on the exemption, the Prospectus Directive does not provide for any detailed content requirements applicable to such a document. Accordingly, the Austrian Financial Markets Authority (Finanzmarktaufsichtsbehörde - FMA) has published an ordinance setting out minimum content requirements that should be observed when drafting these documents.

Exchange offers in connection with takeovers

Securities offered in connection with a takeover by means of an exchange offer are exempt from the prospectus requirement under Austrian law if a document is published that contains information equivalent to that of a prospectus. To benefit from the exemption, such a document should at least include the kind of information required for offer documents pursuant to clause seven of the Austrian Takeover Act (Übernahmegesetz ÜbG) as well as a confirmation of an independent expert certifying that the offer documents are complete and in compliance with clause nine ÜbG (clause two of the Minimum Requirement Ordinance).

In essence, information required for offer documents pursuant to clause seven ÜbG includes information on (i) the terms of the bid, (ii) particulars of the offeror company including type, name and registered office, direct or indirect holdings in the offeror company and its affiliation to a group of companies, (iii) the securities which are the subject of the bid, (iv) the consideration offered for each security and the method of valuation used, (v) details on the conduct of the bid, (vi) all conditions and rights of withdrawal to which the bid is subject, (vii) the period for acceptance of the bid and for provision of the consideration and (viii) where consideration is offered in the form of securities, their particulars.

Mergers

Similarly, securities offered or allotted in connection with a merger may be exempt from the obligation to publish a prospectus if a document is published that contains information equivalent to that of a prospectus. Clause 3 of the Minimum Requirement Ordinance provides further guidance by clarifying that such document has to incorporate at least the merger agreement, the financial statements of the companies involved for the last three years including the management reports (Lageberichte) and, if applicable, an interim balance sheet, the external auditor's report, the merger reports and the supervisory board's report.

Free shares, dividend shares and securities offered to directors or employees

Further exemptions from the obligation to publish a prospectus exist for shares offered or allotted free of charge to existing shareholders, for dividends paid out in the form of shares of the same class as the shares in respect of which such dividends are paid and for securities offered to (former or existing) directors or employees that have been admitted to trading on a regulated market.

All these exemptions are subject to the publication of a document which, in a brief and concise manner, contains the following information: (i) firm name and seat of the issuer, (ii) additional information such as the latest publicly available financial statements or publications made in accordance with statutory disclosure requirements as well as information where such additional information may be obtained, (iii) reasons for the offer, (iv) the legal provisions on the basis of which the document has been drawn up and (v) details of the offer such as addressees, term, minimum/maximum amount per purchaser, issue price, particulars of the respective securities and attaching rights and risks as well as obligations imposed, if any.

Ursula Rath

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